Author name: Administrator

10. Profit is a part of

A) Income
B) Owner’s capital
C) Assets
D) All of the above
✅ ANSWER: B
Profit is a part of Owner’s capital. When a company generates a profit and retains a portion of that profit after subtracting all of its costs, the owner’s equity generally rises.

56. With whom do we associate the concept of Human Life Value?

A) Martin Luther
B) Prof.H.S.Huebner
C) J.M.Keynes
D) Warren Buffet
✅ ANSWER: B
With Prof.H.S.Huebner we associate the concept of Human Life Value. Human life value (HLV) concept is an economic theory developed in 1920’s that attempt to assign a monetary value to one’s life.

58. Discriminating monopoly is possible if two markets have

A) Rising cost curves
B) Rising and declining cost curves
C) Different elasticity of demand
D) Equal elasticity of demand
✅ ANSWER: C
Discriminating monopoly is possible if two markets have different elasticity of demand. Price discrimination is possible only when the buyers from different sub-markets are willing to purchase the same product at different prices. If the elasticity of demand is the same, then the effect of the price change on the buyer will be identical too.

61. Whose obligation is to pay claim?

A) Insurer
B) Insured
C) Underwriter
D) Proposer
✅ ANSWER: A
Insurer obligation is to pay claim. When a policyholder files a claim under his or her own insurance policy, the insurer has certain obligations to the insured and has a duty to act with good faith in handling that claim.

67. Long period of bond maturity leads to

A) more price change
B) stable prices
C) standing prices
D) mature prices
✅ ANSWER: A
Long period of bond maturity leads to more price change. With bonds, term to maturity is the time between when the bond is issued and when it matures, known as its maturity date, at which time the issuer must redeem the bond by paying the principal or face value.

11. Earned but not yet received income is treated as

A) Asset
B) Liability
C) Loss
D) Capital
✅ ANSWER: A
Earned but not yet received income is treated as Asset. It is income earned during a particular accounting period but not received until the end of that period. It is treated as an asset for the business.

79. During planning period, a marginal cost for raising a new debt is classified as

A) debt cost
B) relevant cost
C) borrowing cost
D) embedded cost
✅ ANSWER: B
During planning period, a marginal cost for raising a new debt is classified as relevant cost. Relevant cost is a managerial accounting term that describes avoidable costs that are incurred when making business decisions. The concept of relevant cost is used to eliminate unnecessary data that could complicate the decision-making process.
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